Noting an additional $70 billion in funds for states to use to reduce premiums, hold down out-of-pocket costs, and improve the general affordability of health care, the Senate issued a revision draft of the Better Care Reconciliation Act (BCRA) (H.R. 1628), which would repeal and replace the Affordable Care Act (ACA) (P.L. 111-148). The revised bill’s funding additions for states are on top of the $100 billion already earmarked in the previous bill. The revised bill also includes provisions known as the Cruz Amendment, as introduced by Sen. Ted Cruz (R-Tex.), which allows for cheaper insurance plans in exchange for plans with benefits that do not meet current ACA requirements. The draft of the revised bill is expected to be scored by the Congressional Budget Office (CBO) in the next week.

The revised draft bill would still eliminate Medicaid expansion and convert the federal health care program to a system of fixed payments. However, state Medicaid spending, most notably in instances of a public health emergency, would not count towards any spending limits or per capita caps. The revised draft does not include any changes to the Medicare payroll tax paid by high-income earners, nor does it change the limits on the tax deductions that insurers can take for salaries and other remuneration paid to health care executives.

Enrollees in catastrophic health insurance would also be eligible for federal tax credits to pay premiums. Under the ACA, consumers generally could not use the tax credits to pay for these health plans. In addition, the bill would allow people to use health savings accounts to pay insurance premiums.

Changes. The revised draft would keep the two taxes imposed by the ACA—3.8 percent tax on investment income and the 0.9 percent payroll tax—on high income earners, specifically individuals that earn over $200,000 or couples with incomes over $250,000. The previous Senate draft would have repealed both those taxes, which would have reduced federal revenues by $231 billion over 10 years according to a CBO and congressional Joint Committee on Taxation report (see BCRA would curb Medicaid spending growth, increase uninsured numbers, June 30, 2017).

In addition to keeping the two ACA taxes, the revised draft BCRA includes provisions based on the Cruz Amendment that would permit insurers to offer health plans that do not comply with the ACA under certain conditions (see this issue, Kaiser ballparks cost of Cruz amendment, July 19, 2017). Essentially, the proposal would allow an insurer offering "sufficient minimum coverage" on the exchange to also offer coverage outside of the federal exchange that would be exempt from many of the ACA’s requirement.

Additionally, opioid addiction treatment and research would receive $45 billion from 2018 to 2026 in grants to states, including counseling, medication assisted treatment, and other substance abuse treatment and recovery services.